Change as the Only Constant: Success (and Failure) Stories of Adaptation

Published by Fintech Americas on Apr 17, 2023

These business success and failure stories illustrate how essential the ability to adapt to constant change is for organizations.

Over the past decades, Digital Transformation has been viewed as a promise of business survival that nearly every institution has sought to pursue. As a result, investments in new technologies reached billions of dollars and generated varying levels of success.

However, Digital Transformation as a broader concept has carried two mistaken assumptions that many companies still hold while trying to innovate and stay ahead of the competition. The first is that Digital Transformation is primarily about investing in new technologies. The second is that it has a beginning and an end. This approach has become somewhat outdated for the times we live in today.

The speed and hyper-digitalization of our world now demand that companies focus on what truly matters: their ability to adapt. In other words, the capability to continuously respond positively to changes in the environment in order to ensure ongoing survival. And to repeat that process over and over again — infinitely.

Today, without adopting new technologies and transitioning from analog to digital, adaptation is impossible. But on its own, that will not change anything. Organizations must also pay attention to context, customer needs, and evolving conditions. As Deloitte explains:

“Digital transformation is an ongoing effort that goes far beyond a single technology, platform, or set of capabilities. It is the fabric of business survival amid continuous disruption.”

In other words, adopting new technologies individually, without purpose or business vision, will not create optimal results.

According to another analysis from the same consulting firm, the right combination of digital transformation initiatives could generate up to $1.25 trillion in additional market capitalization across Fortune 500 companies. However, the wrong combinations could erode market value and put more than $1.5 trillion at risk.

The infinite adaptation approach, on the other hand, allows companies to take a more holistic path toward Digital Transformation that considers every dimension — including the most human and qualitative aspects. It also means radically accepting the need to act continuously in response to the only constant: change. As Harvard Business Review explains:

“Instead of being really good at doing one specific thing, companies need to become really good at learning how to do new things.”

The ability to adapt quickly to the environment is a key success factor. Organizations that thrive have developed the ability to read the signals of change and take appropriate action. They tend to experiment profitably not only with their products and services, but also with their business models, processes, and strategies. Ultimately, their commitment to adaptation and experimentation allows them to remain competitive.

The following are examples of success and failure in how different organizations interpreted the transformations taking place in our world and either adapted — or failed to adapt. As these examples demonstrate, successful organizations are those that implemented the right combination of motivation, vision for change, and the proper tools to achieve results.

The Cost of Failing to Adapt in Time

Nokia

For many years, Nokia was known as a company with strong innovation capabilities and a forward-looking vision. But at some point, its strength became its weakness, and it stopped adapting.

In 2007, Nokia held more than 50% of the global smartphone market. By 2013, it held less than 3%. That same year, the company sold its mobile phone business to Microsoft. Shortly afterward, Microsoft discontinued the brand and product line.

The irony is that Nokia invented the first smartphone in 1996. But its reluctance to embrace the pace and nature of software development, the rapid evolution of consumer expectations, and the innovative power of companies like Apple and Samsung ultimately led to its downfall. Adaptation is, above all else, about understanding the environment around us and responding with agility to changing conditions. Nokia failed to do so.

Yahoo

Yahoo launched in 1994 during the early days of the Internet and quickly became the leading web portal for online search, news, and email services.

In 2010, the company was valued at $125 billion. Six years later, it sold what remained of the business to Verizon for $4.8 billion — a loss of more than 95% of its value.

Like Nokia, Yahoo’s downfall came from failing to pay enough attention to changes in the environment — specifically, changes in user preferences. Users wanted and needed clear, simple interfaces. Yahoo’s lack of close connection with its customers and unwillingness to change its design approach resulted in one failure after another. While struggling to invest appropriately internally, it also failed externally. In 1998, it had the opportunity to acquire Google for $1 million. It declined.

Visionaries and Winners: Success Stories of Adaptation

Netflix

Netflix was founded in 1997 with the idea of offering DVD rentals by mail, which at the time was one of the most advanced forms of media distribution.

In 2001, Reed Hastings, CEO of Netflix, recognized the possibilities that technological advancements would create, connected them with changing consumer habits, and envisioned a future where movies would be streamed over the Internet directly to televisions in people’s homes.

Twenty-two years later, Netflix has more than 220 million paid subscribers (some still receive DVDs by mail!) and a market valuation of $143 billion. Its commitment to constant adaptation has been the key to its exponential growth and its profound impact on how people around the world consume entertainment content.

Banco Industrial, Guatemala

Founded in 1968, Banco Industrial is one of Guatemala’s most important financial institutions and one of the largest in Central America. The bank provides services through a network of more than 3,180 locations across Guatemala, as well as comprehensive web and mobile digital banking access from anywhere in the world.

The company has a customer-centric culture that drives it to continuously seek technological innovations applied to processes, products, and services — always viewed through the lens of customer needs. Anticipating the rise of digital banking, the institution made the visionary decision in 2016 to heavily invest in a process that would allow users to conduct online transactions.

To accomplish this, the bank implemented digital facial recognition technology, which at the time was highly innovative. The initial results were so successful that the organization has continuously adapted and redesigned its product portfolio ever since in order to offer cutting-edge digital solutions and the best user experience. Thanks to this decision and adaptive mindset, the bank was able to capitalize on the exponential growth in digital channel adoption, increasing from 91,000 banking app users in 2016 to nearly 551,000 in 2022.

LEGO

Created in 1932 by a Danish carpenter, LEGO began as a wooden toy block company. During the 1940s, due to rising wood costs caused by war and later global economic recovery, leadership decided to manufacture its iconic building blocks in plastic.

This led to significant growth, but also created an excessive willingness to take innovation risks, placing the business in jeopardy and nearly driving it into bankruptcy in 2003.

The leadership team reset its innovation strategy, changed priorities, and doubled down on adapting its core product — LEGO bricks — to a new world. With one eye on the market and the other on internal processes, the company introduced innovations that, while not necessarily disruptive, were enough to thrive: they revitalized their original products by collaborating with franchises such as Star Wars and Harry Potter; launched movies and video games; and built theme parks, among other initiatives that helped them reach audiences of all ages, casual buyers, and collectors alike. Today, LEGO is considered the world’s most valuable toy company — all thanks to its adaptability.

As these stories demonstrate, the pressure to innovate never disappears, and the answer lies in developing adaptability — a capability that has become indispensable for institutional success. A new whitepaper written by Chris Colbert, former Managing Director of Harvard Innovation Labs, explores this paradigm shift.

The document explains why digital transformation alone is no longer enough and examines the challenges organizations face today, such as the shift toward remote work and the escalation of cyberattacks. It provides advice and resources that can help your institution move several steps closer to becoming truly adaptive.

DOWNLOAD WHITEPAPER

And if you want to fully immerse yourself in the new era of Adaptation, you may be interested in attending . This event focused on “The End of Transformation and the Beginning of Infinite Adaptation” and took place on May 4–5 at the Fontainebleau Hotel in Miami Beach, Florida.

More than 150 speakers shared their perspectives on emerging technologies, Digital Transformation, and adaptation across more than 90 sessions. Featured speakers included Douglas Terrier, Associate Director for Vision & Strategy at NASA; Umar Farooq, Global Head of Financial Institution Payments & CEO of Onyx at J.P. Morgan; and Alejandro Valenzuela, CEO of Banco Azteca and Azteca Financial Services.

Don’t miss this opportunity to connect with the leaders driving this new paradigm of Adaptation and to explore the latest technologies: Artificial Intelligence, the metaverse, digital payments, virtual reality, and much more.

BUY YOUR TICKET NOW